1. 1 Government Pension Fund – Global London, May 2008 Martin Skancke Director General Asset Management Department

2. Norwegian Ministry of Finance 2 The petroleum sector in relation to the Norwegian economy Source: Statistics Norway, Ministry of Finance 25 % 38 % 24 % 51 % The petroleum sector’s share of GDP The petroleum sector’s share of state revenues The petroleum sector’s share of total investments The petroleum sector’s share of total exports

3. Norwegian Ministry of Finance 3 Return on fund investments Fund Transfer to finance non-oil budget deficit Revenues Expenditures State Budget The Fund mechanism – integrated with fiscal policy Fiscal policy guideline (over time spend real return of the fund, estimated at 4%) Petroleum revenues

4. Norwegian Ministry of Finance 4 Norway’s fund: Function The Norwegian fund USD 375bn and growing: a tool for  long-term wealth management  short and medium term stabilization Integrated with fiscal budget Invested only abroad Transparency

5. Norwegian Ministry of Finance 5 Pension Fund - Global Governance Structure Ministry of Finance  Regulations  Performance reports Central Bank (NBIM) Norwegian Parliament  Pension Fund Act  Performance reports and strategic changes reported in National Budgets and National Accounts Legislator Principal Manager  Management agreement Office of the Auditor General Norges Bank Audit Advisors  Advisory / consultancy agreement Founded on Act, regulations and separate contracts

6. Norwegian Ministry of Finance 6 Norway’s fund: Key features Aim: Maximize financial returns Financial investor with non-strategic holdings. Separation of roles between owner and operational manager High degree of transparency Ethical guidelines that are transparent and predictable, based on internationally recognized standards

7. Norwegian Ministry of Finance 7 The value of SWFs Free capital movements Allow capital exporters to - decouple consumption and current revenues - improve risk/return ratio on savings Allow capital importers to - decouple investments and domestic savings - improve productivity through productive investments SWFs may contribute to increased stability in financial markets  Long time-horizon  No liabilities  Little or no need for liquidity in the short term